IPBiz

Friday, September 30, 2005

Techdirt: "Intellectual property laws are created without any empirical evidence that they are necessary or that they will help rather than hurt." This is the argument we've been making for years. For us, the question of intellectual property isn't a "moral" issue. It's not about how "information needs to be free." It's an economic issue, plain and simple. There's increasing evidence to show that many of these intellectual property laws tend to harm innovation and slow down economic development. It would seem like these are the types of things that anyone making intellectual property laws would want to understand. Instead, they seem to insist that "more protection is better" when the evidence has shown the opposite to be true.

The evidence for this was a 2002 post on Techdirt:A new report from the Commission on Intellectual Property Rights goes even further in their description of the dangers of current intellectual property laws. They point out that, in many cases, intellectual property laws are very bad for the poor, and delays the growth of new ideas and technology. The report recommends that many developing nations not set up a similar draconian intellectual property system. I have to say I'm surprised, but glad, to see that this topic is receiving some serious debate. Too many people seem to assume that current intellectual property laws must make sense. There are better ways to support intellectual property without resorting to laws that actually hold back innovation.

Saying the IP laws delay growth of technology, proving it is another. Pharmaceutical research is an example wherein IP laws have stimulated research and created new drugs. Even with strong funding by the NIH and others, it still takes the "promise of return" to pay for the development and testing.

Integra acquires IP of Eunoe

Integra LifeSciences, of fame in the Supreme Court case Merck v. Integra, announced Sept. 29 that it has acquired the intellectual property estate of Eunoe, Inc. Prior to ceasing operations, Eunoe, Inc. was engaged in the development of its innovative COGNIShunt(R) system for the treatment of Alzheimer's disease patients. The COGNIShunt(R) system was evaluated under an FDA Investigational Device Exemption.

"The acquisition of the Eunoe intellectual property estate and clinical trial data considerably extends our technology base relevant to the management of conditions that require regulation of Cerebrospinal Fluid (CSF) flow within the brain. The traditional application of this technology is for the treatment of hydrocephalus, which is currently one of our key markets," said Simon Archibald, Ph.D., Integra's Chief Scientific Officer. "The core of Eunoe's approach is the modulation of the chemical environment experienced by neurons in the ageing brain. The COGNIShunt(R) system is intended to regulate a low but steady flow of CSF from the brain. The increased CSF flow is intended to stimulate CSF production and thereby improve clearance of neurotoxins, which are believed to contribute to the progression of Alzheimer's disease, from the CSF. The team at Eunoe published the promising results from their Phase I/II feasibility studies in the Oct. 22, 2002 issue of the journal Neurology."

**

In the Supreme Court case, the IP rights asserted by Integra had been acquired from a third party. If (hypothetically) Integra loses the case on remand, the type of activity of Integra would be discouraged. Anyone could do FDA-related research on anyone else's patents. Given the length of time required to meet regulatory requirements, the patent lifetime would likely expire before a product was ready for market.

The particular issue was improper access to grant applications stored on the university computer system. As one put it: "Can you address what staff are permitted to do with our grants on file, since many might have access to the server where faculty store their work?" If a third party took information from the computer, and used it under the name of the third party, there would be issues of plagiarism and misappropriation.

from the Bowdoin Orient:

After an investigation into a claim that a senior administration official improperly used the work of a faculty member in a grant application, President Mills said in an interview with the Orient that the "issue has been resolved" and that all parties concerned "are in good standing with the College."

Mills would not discuss details of the College's decision in regard to the matter, reported in last week's issue of the Orient. The allegation, made public at a faculty meeting last April by Professor of Biology Carey Phillips, consisted of a claim that a faculty member's work was submitted as a grant proposal without attribution or permission from that faculty member.

In THE DISCLOSURE FUNCTION OF THE PATENT SYSTEM (ORLACK THEREOF), 118 Harv. L. Rev. 2007 (2005), it is argued that the patent system fails in its disclosure function and that most information in patents is (freely) available elsewhere. In a recent release by Research and Market [below], it is stated that 75% of the information in patent documents is not available elsewhere. Which is the correct picture?

Of another point in the Harvard Law Review, the idea that commercialization of valuable inventions is probably the most important rationale of the patent system is simply wrong. We do not want the government intervening in a free market economy by issuing patents only on what government officials think likely to be commercialized. The present system grants limited time rights to exclude in return for disclosure. The public gets the disclosure and business people figure out what to commercialize.

**

Research and Markets (www.researchandmarkets.com) has announced the addition of Patent Analysis of Adenosine A2A Receptor Agonists to their offering.

This is a competitive intelligence report of Adenosine A2A Agonists utilizing patent analysis. Extensive patent mining techniques were utilized to produce a base patent set of 202. This base set was then organized and analyzed for competitive intelligence. It has been reported that 75% of the information in patent documents is not available elsewhere. Therefore, this report provides valuable non-scientific literature data organized for actionable intelligence.

The data from this report was collected through October 2004. The patent databases utilized were the USPTO (United States Patent and Trademark Office), EPO (European Patent Office), WIPO (World Intellectual Property Organization), DPMA (German Patent and Trade Mark Office) and the JPO (Japan Patent Office).

Research and markets claims to give information on:

Highlights:

-- Comprehensive patent overview of Adenosine A2A receptor agonists

-- Backward and Forward Citation Maps [Oh no, patent citation...]

-- Innovation Speed and Patent Strength Indicators

-- Patent Distribution Charts of each company

This report will give you an overview of major and minor players in the field. It enables you to assess your position in this area of research and discover potential acquisition targets. From reading this report you will learn the "Patent Strengths" of key patents.

Belgian pharmaceutical group Innogenetics said it has filed complaints in the US against Abbott Laboratories and the US' Third Wave Technologies for patent infringement of one of its hepatitis C (HCV) virus genotyping patents, and that the proceedings may impact its revenues for this year and 2006. [from AFX through Forbes]

See earlier posts on IPBiz [Sept. 4, Sept. 5] about patent litigation between Third Wave and Stratagene. Patents at Third Wave have been gained through the Bayh-Dole Act.

USPTO rejects claims of NTP's US '592 in re-exam; part of Blackberry fight

The USPTO, in re-examination, has ruled against the claims of the last of five NTP Inc. patents at the center of a legal dispute between NTP and BlackBerry maker Research In Motion Ltd., NTP confirmed Sept. 29. The patent is US 6,317,592.

US 6,317,592 issued on Nov. 13, 2001 and it has been cited by two US patents. It is another example of a litigated patent not cited by many US patents. It is part of a long continuation string; the patent is based on an application which is a Continuation of U.S. patent application Ser. No. 09/161,462, filed Sep. 28, 1998, now U.S. Pat. No. 6,067,451 which is a Continuation of U.S. patent application Ser. No. 08/844,957, filed Apr. 23, 1997, now U.S. Pat. No. 5,819,172; which is a continuation of U.S. patent application Ser. No. 08/443,430, filed May 18, 1995, now U.S. Pat. No. 5,625,670; which is a continuation of U.S. patent application Ser. No. 07/702,939, filed May 20, 1991, now U.S. Pat. No. 5,436,960.

In all, the examiners at the Patent Office have rejected 100% of the 1,921 claims contained in the re-examined patents filed by NTP Inc.

Thursday, September 29, 2005

AmberWave sues Intel over US 6,946,371

US 6,946,371 issued on September 20, 2005 and AmberWave sued Intel over the '371 on September 20, 2005. Of the idea that highly-cited patents are involved in litigation, it should be self-evident that the '371 was not cited by any patents on Sept. 20. The same could be said of the infamous University of Rochester patent on COX-2 inhibitors.

Within the '371, there is a claim of priority to and the benefit of U.S. Provisional Application Ser. No. 60/387,867 filed Jun. 10, 2002.

An earlier patent to AmberWave, US 6,831,292, claims priority to a different provisional, No. 60/324,325, filed Sep. 21, 2001.

The first claim of the '292 recites:

A semiconductor structure comprising:

a substrate; and

at least one strained layer disposed on the substrate, thereby defining an interface therebetween, the at least one strained layer having a distal zone away from the interface;

wherein the substrate, the interface, and the at least one strained layer are characterized at least in part by an impurity gradient having a value substantially equal to zero in the distal zone.

AmberWave Systems Corp., a developer of strained silicon technology, said Thursday (Sept. 29) that it filed a complaint against Intel Corp. in the federal district court in Marshall, Texas, on Sept. 20 alleging infringement of its recently issued U.S patent numbered 6,946,371. The company added that since then Intel has filed a lawsuit seeking a declaration that it does not infringe the same patent in the federal district court in Wilmington, Delaware. The lawsuits around the 371 patent follow earlier cases filed by the parties in Texas and Delaware that relate to Intel's alleged infringement of two other AmberWave patents: U.S Patent Nos. 6,831,292, and 6,881,632.

“Intel has made a decision to use AmberWave's patent-protected technology without a license,” claimed Richard Faubert, AmberWave chief executive officer, in a statement. “We have no choice but to protect against this unauthorized use,” Faubert added.

Icoria annouces notice of allowance on TissueInformatics applicaiton

Biotechnology company Icoria, Inc. announced on September 29 that it has received a Notice of Allowance from the U.S. Patent andTrademark Office for a pending patent application related to the highthroughput measurement of blood vessels in a tissue sample. This recently allowed patent application is a part of the portfolio of issued and pending patents that Icoria purchased in 2004 in the acquisition of TissueInformatics of Pittsburgh. [L.B. Ebert worked on many of these applications.] The allowed patent application, entitled "Methods for Quantitative Analysis of Blood Vessel Structure," is drawn to cover the methods of geometrical analysis that enable the automated measurement of several features of images of tissue. These methods allow fast, repeatable and accurate analysis of tissue samples. The proof-of-concept work underlying the application involved a cardiovascular device study in an animal model of therestenosis-like response of blood vessels injured by balloon angioplasty. Possible applications for the technology include the cardiovascular device market. "Quantitative tissue analysis represents an important advance incharacterizing disease progression and, as in the proof-of-concept work here, potential therapeutic outcomes," said Thomas Colatsky, Chief Scientific Officer and Vice President of Research. "Our growing portfolio of patents covering methods of quantitative tissue analysis not only supports our internal capabilities in biomarker discovery, but may also represent a potential licensing opportunity for companies requiring new ways of extracting high content biological image data for clinical and preclinical research." Icoria has four issued U.S. patents and thirteen U.S. and international patent applications in its quantitative tissue analysis portfolio. The company has a total of 70 pending U.S. patent applications, 42 pending international patent applications, and 24 issued U.S. patents.

Office Action in re-exam of Cabilly patent unfavorable to Genentech

US 6,331,415 (issued December 18, 2001) is entitled Methods of producing immunoglobulins, vectors and transformed host cells for use therein and has as its first claim

A process for producing an immunoglobulin molecule or an immunologically functional immunoglobulin fragment comprising at least the variable domains of the immunoglobulin heavy and light chains, in a single host cell, comprising the steps of:

(i) transforming said single host cell with a first DNA sequence encoding at least the variable domain of the immunoglobulin heavy chain and a second DNA sequence encoding at least the variable domain of the immunoglobulin light chain, and

(ii) independently expressing said first DNA sequence and said second DNA sequence so that said immunoglobulin heavy and light chains are produced as separate molecules in said transformed single host cell.

Although not issued until 2001, the application for the '415 was filed June 10, 1988 (app. 205419). Of priority, the '415 states: This application is a continuation of U.S. patent application Ser. No. 06/483,457, filed Apr. 8, 1983, now U.S. Pat. No. 4,816,567, issued Mar. 28, 1989.

In an Office Action on a re-examination requested by lawyer Lisa V. Mueller, the USPTO rejected the claims based on double-patenting. It may be that Genentech was doing something similar here to what Columbia University was doing with the Axel patents.

Of relevance to the patent reform discussion about HR 2795, it is apparent that more people are taking advantage of re-examination procedures.

J&J loses implant patent case

John Corbitt and Lori Leonetti developed an idea for an implant to mark where a woman had breast tissue removed for a biopsy, so that doctors could monitor the area for potential health problems. According to Corbitt and Leonetti, the pair secured a patent for the implant, and spent two years in the late 1990s talking with Johnson & Johnson about manufacturing or marketing it. Based on these dates, one infers they may have been talking after filing provisional applications.

J&J later bought California-based Artemis Medical Inc., which was selling a similar implant by another doctor whose patent wasn't valid because it was approved months after the one Corbitt and Leonetti obtained, said Jack Scarola, Corbitt and Leonetti's attorney.

A federal jury in Miami found on Sept. 28 J&J must agree to give surgeon John Corbitt and physician assistant Lori Leonetti 10 percent of an estimated $39 million in annual revenue from the implant if Johnson & Johnson wants to continue selling it.

The '045 patent has been cited in twelve US patents, two of which are to the inventors (6,638,308 and 6,681,226).

US 6,913,626 gives some background on implants:

Medically implantable prostheses, exemplified by breast implants, are well known in the art. Such implants generally comprise a formed body presenting a nonreactive, biocompatible outer surface to surrounding tissue following implantation. The implant is recognized as a foreign body by the host's immune system and is encapsulated, walling the implant off from the rest of the host's body. As the capsule ages, molecular rearrangement within the capsule change the overall shape of the capsule. If the implant is deformable, such as is the case with fluid-filled prostheses, the shape of the implant will change to conform to the shape of the surrounding capsule. In many patients hosting fluid-filled prostheses, such as patients receiving a breast implant, the capsule slowly undergoes "spherical contracture", palpably changing the shape and feel of the implant. Such spherical contracture is generally regarded as undesirable.

Mylan prevails against Alza over Ditropan (oxybutynin)

Alza, of Mountain View, CA (a subsidiary of Johnson & Johnson Co. of New Brunswick, NJ) said the U.S. District Court for the Northern District of West Virginia, ruled Sept. 27 that its patent on Ditropan XL (oxybutynin chloride) extended release tablets is invalid and that Mylan Laboratories Inc. does not infringe Alza's patent. The company says it will appeal the decision to the Court of Appeals for the Federal Circuit in Washington, DC.

from businessweek:

Alza Corp., owned by health-care products company Johnson & Johnson Inc., said Wednesday that it will appeal a federal district court decision striking down the validity of its Ditropan overactive bladder treatment patent.

The court ruling allows Mylan Laboratories Inc. to step closer to marketing a generic version of the drug. At issue is the extended-release version Ditropan XL, also known as oxybutynin chloride. A West Virginia federal district court ruled that Mylan's version does not infringe patents held by Alza.

In January, Mylan received tentative approval from the FDA for the 5 milligram and 10 milligram tablets of the drug. Tentative approvals usually become final after the resolution of patent issues.

Wednesday, September 28, 2005

If at first you don't succeed, destroy all the evidence that you ever tried

That used to be conventional wisdom in patent law, but times have changed. More on that later.

The quote actually comes from a book on the Civil War, Lost Triumph: Lee's Real Plan at Gettysburg -- and why it failed. The book argues that Lee's real plan on July 3, 1863, a three-pronged attack, has been concealed or, at least unappreciated, for the last 142 or so years.

Everybody knows about Pickett's Charge. Mildly interested people know about the (earlier) attack on Culp's Hill. The author, Tom Carhart (once a lawyer), argues that Stuart's cavalry attack, to reach Baltimore Pike, has sort of been covered up. We have language: "Nothing good for the South could come out of Lee admitting to anyone that he had tried to turn a Union Wing with a cavalry-infantry combination." While the text "nothing good could come out of admitting...." reminds me of some aspects of HR 2795 on patent reform, Stuart's cavalry attack is not exactly a secret. For example, the special issue of Civil War Times Illustrated on Gettysburg, published years ago, had a rather complete story on Stuart's attack (and also had some lesser known facts, like that Gettysburg had been occupied by the Confederates the week before July 1). And, on US 30, east of Gettysburg, there are plenty of signs marking parts of the cavalry engagement. George Armstrong Custer was in large part responsible for turning back Stuart, and perhaps deserves more credit for his role at Gettysburg. But the cavalry action is known to people serious about Gettysburg.

***As a further note on the Civil War Times Illustrated

The special issue I refer to, Gettysburg!, was I believe initially published in 1963 and republished in 1980. The article "Cavalry Fight at Gettysburg" was written by Wilbur S. Nye, and appears on page 29 of the issue. The first two sentences state: Early July 3 General Lee told Stuart to protect the army's left flank. Additionally Stuart hoped to attack the Federal rear if Longstreet's assault was successful. A later sentence states Early in the afternoon a hot firefight began, which was the first phase of the battle.

****

A more "secret revealing" book from a few years ago suggested that Lewis Paine, frequently portrayed as a dumb, ox-like creature in the Lincoln conspiracy, actually was an agent of the Confederate government, and had previously worked with Mosby.

Intense fighting erupted on Culp's Hill at 4 AM on July 3, and by 11 AM Union troops had secured the hill, firmly anchoring the point of the Union "fishhook" line.[one of Carhart's prongs] With the loss of his advantage at Culp's Hill, Lee decided to alter his strategy. Having already ordered his cavalry chief, "JEB" Stuart, to ride around the Union position and attack the Union supply line[Carhart's "hidden prong"], Lee decided to strike what he thought to be a weakened Union center on Cemetery Ridge where he observed few troops and only a handful of batteries.

Within the hour [after Pickett's Charge], a courier informed Lee of JEB Stuart's defeat three miles east of Gettysburg at what is known today as East Cavalry Field. Stuart successfully marched east of Gettysburg and turned his force south where they encountered a strong Union cavalry force blocking the Hanover Road. A spirited battle ensued with troopers of both armies fighting on foot and horseback. Southern charges meant to slice through the Union line were stopped cold by Union cavalrymen led by Brig. General George Armstrong Custer. His attempt to raid the Union rear thwarted, Stuart withdrew and retired toward Gettysburg.

***from Wikipedia

General Lee wished to renew the attack on Friday, July 3, using the same basic plan as the previous day: Longstreet would attack the Federal left, while Ewell attacked Culp's Hill. However, before Longstreet was ready, Federal XII Corps troops started a dawn artillery bombardment against the Confederates on Culp's Hill in an effort to regain a portion of their lost works.

There were two significant cavalry engagements on July 3. Stuart was sent to guard the Confederate left flank and was to be prepared to exploit any success the infantry might achieve on Cemetery Hill by flanking the Federal right and hitting their trains and lines of communications. Three miles (5 km) east of Gettysburg, in what is now called "East Cavalry Field" (between the York and Hanover Roads), Stuart's forces collided with Federal cavalry: Brig. Gen. David McM. Gregg's division and George A. Custer's brigade. A lengthy mounted battle, including hand-to-hand sabre combat, ensued. Custer's charge, leading the 1st Michigan Cavalry, blunted the attack by Wade Hampton's brigade, blocking Stuart from achieving his objectives in the Federal rear.

***from a review of Wert's Gettysburg, Day 3

The only thing that separates this Day Three study from the rest is the detail it gives to the 4 cavalry actions on July 3rd. Generally most only mention Custer's and Stuart's action southeast of the field and Kilpatrick's assault on the Confederate right.

***from the Patriot-NewsConfederate cavalrymen under Maj. Gen. J.E.B. Stuart took position on the field, three miles east of Gettysburg. Their objective was to exploit the anticipated success of the Confederate infantry assault on Cemetery Ridge in Gettysburg. Stuart hoped to sever the Union line of communication.

Brig. Gen. David McMurtrie Gregg, commander of the Union second cavalry division, thwarted Stuart's attack, however. In the encounter at Rummel farm, Stuart had not counted on the accuracy of the Northern artillery which repeatedly knocked out his gun crews.

***from a book review of Carhart's book

While reading the book I could not help thinking of the highly fictionalized 1941 Errol Flynn movie They Died with Their Boots On. The movie by accident said the same thing Carhart does: In a scene at the War Dept., Winfield Scott exclaims that Stuart was moving into the Army's rear or flank (can't remember which) and there was no one to stop him. After dramatic movie cavalry charges, the War Dept. scene comes back saying Stuart was retreating because of Custer. I could not stop thinking about this clip all through reading this groundbreaking book.

Of this thread, there is some specific criticism of the plausibility of Carhart's conjecture, specifically as to how much impact Stuart might have had if Stuart not been checked by Custer. In short, even if successful, would the "real plan" (successfully implemented) have produced a Confederate triumph at Gettysburg? Who can say? But Carhart's point was that the three-prong strategy had been covered up all these years.

No one on Tacitus addressed the issue of the Culp's Hill prong being over before Stuart or Longstreet/Pickett attacked (i.e., there was no third prong) or the issue that Stuart's engagement has hardly been concealed over the years. There is no evidence that the "exploit any success" motif is inconsistent with what happened.

Law review article: Who owns stem cell breakthroughs?

Sean M. O'Connor says

In conclusion, the current patchwork, hit-or-miss IP rights allocation system in stem cell research will lead to a nightmare of litigation proportional to the very success of the most ambitious projections for stem cell therapies.

Further, until a future presidential administration relaxes the current limitations on federal funding of hPSC research, the stem cell therapy environment will suffer a reduced ability of the standard Bayh-Dole IP rights allocation framework togovern, as it will formally apply to a smaller subset of patents arising in the field. At the same time, non-traditional funding and IP rights allocation systems, such as Proposition 71 may come to dominate the field, creating a tangle of ownership claims.

39 New Eng.L. Rev. 665

LBE says: O'Connor sets the baseline as the "standard Bayh-Dole IP rights allocation framework." When taxpayers in California, Kansas, New Jersey, etc. find out they are getting no benefits out of their tax dollars, there might be a bit of disenchantment. Taxpayers do not want to be, unknowingly, venture capitalists. The standard Bayh-Dole allocation framework is being questioned (see Sept. 15 post on IPBiz about the article in Fortune on Bayh-Dole).

Eolas' US 5,838,906 to survive re-examination

On Sept. 27, 2005, the USPTO sent out a "notice of intent to issue a re-examination certificate," indicating that US 5,838,906, in this case with unamended claims, will survive re-examination.

In the re-exam (90/006,831; filed 30 Oct 2003), there was a non-final rejection on August 16, 2004, and a response received by the USPTO on October 12, 2004. [In passing, one notes that the re-exam process took about two years in this case.]

The thirty (30) page response, by Charles E. Krueger of Walnut Creek, CA, made points about MPEP 2143.03 and MPEP 2143.01 and argued

no suggestion of automatically invoking an external application to execute on a client computer...

no suggestion of passing an embed text format at a first location in a hypermedia document.

The Eolas case places Eolas and the University of California/Berkeley in the nominal position of patent trolls. Keeping with the academic flavor, Eolas submitted three Rule 132 declarations, two by Edward W. Felten (Princeton) and one by Robert J. Dolan, Dean of the University of Michigan Business School. Of the litigation, in March 2005, in 399 F.3d 1325; 2005 U.S. App. LEXIS 3476; 73 U.S.P.Q.2D 1782, the CAFC remanded the case back to D. Ill.

The CAFC noted that during the initial prosecution, the examiner cited three main prior art references during prosecution: (1) the Mosaic Web Browser, which allows users to go from one website to another by clicking links on web pages and has some capability to display objects; (2 )U.S. Patent No. 5,206,951 to Khoyi et al. (Khoyi), which describes an Object Linking and Embedding System (OLE); n2 and (3) U.S. Patent No. 5,581,686 to Koppolu et al. (Koppolu), which covers some OLE technology where the application displaying data may be a component,

At the trial, Microsoft presented evidence that the Viola Web browser (Viola), invented by Pei-Yuan Wei (Wei), was in public use more than one year before Eolas' invention. Microsoft asserted that this prior art would invalidate the invention under 35 U.S.C. § 102(b). Microsoft also used the Viola reference to challenge validity on the basis of sections 102(a), 102(g) and 103. Wei testified at trial that he had written code for Viola so that the browser couldhandle embedded automatically-launched interactive programs in May 1993. Wei testified as well that he demonstrated that capability to Sun Microsystems engineers at that time. Microsoft corroborated existence of this code at trial through a computer demonstration of an archived file, dated May 12, 1993. The parties refer to this version of Viola as DX34. Wei demonstrated DX34 to two SunMicrosystems engineers on May 7, 1993.

The district court erroneously found as a matter of law that Wei abandoned, suppressed or concealed DX34 within the meaning of section 102(g) because Wei disclosed that version only to the Sun engineers and then changed it.

On remand, the district court must analyze Wei as prior art AND the failure of the patent applicant to disclose Wei to the USPTO. Neither of these matters was at issue during re-examination.

The discussion by the CAFC does not bode well for the inequitable conduct issue raised by the failure to disclose Wei:

Michael D. Doyle (Doyle), one of the inventors of the '906 patent, knew of Viola yet did not disclose any information regarding that reference to the United States Patent and Trademark Office (PTO). On August 31, 1994, Doyle issued a press release to an e-mail list indicating that researchers at the University of California had "created software for embedding interactiveprogram objects within hypermedia documents." That same day, Wei contacted Doyle via e-mail in response to the press release. Wei alleged that his May 1993 demonstration of Viola (version DX34) to Sun Microsystems engineers exhibited a way to embed interactive objects and transport them over the web. Wei directedDoyle to his paper about Viola (the Viola paper ), which was available on the Internet at least by August 13, 1994. Doyle downloaded and read the paper. In a later email exchange, Doyle attempted to get Wei to concede that he was not thefirst to invent. Additionally, Doyle told Wei the inventions were different.

On October 17, 1994, the University of California filed the '906 patent application. In 1998, before issuance of the '906 patent, Doyle did more research on Viola and made a folder labeled "Viola stuff." This folder included press releases of two "beta" n4 versions of Viola from February and March of 1994. Although available on the Internet, Doyle never obtained the Viola code.

The failure to acknowledge relevant art in the Eolas case may prove to be be bad to the patentee, if inequitable conduct is found. All claims would be rendered unenforceable.

The failure to acknowledge pertinent work reminds one of the failure of intellectual property academics to acknowledge the problems with the 85% patent grant rate of Quillen and Webster. Although the work has been discredited, the academics are still citing it.

At the end of the day, not disclosing the relevant work of others can be harmful, especially in the world of patents. A finding of inequitable conduct would be an interesting end to the Eolas patent, after all the failed efforts to invalidate it.

I do not know what search means were between 1994 and 1998. [LBE note: the USPTO patent database was not available.] I started to use the USPTO site only in December 1999. In my opinion it would be hard to believe that, in 2000 or later, a patent or patent application [? in 2000 ?] on a given subject matter could be unnoticed by all people in a corporation having a dozen of ongoing patent applications on the same subject matter.This is also reasonable to think that in term of patent watch and business intelligence related to computing Microsoft is the second best company in the world, the first one being IBM and that Microsoft had the way to effectively monitor patent applications in 1994. Therefore someone in Microsoft probably read 5,838,906 soon after it was made public. However the knowledge of a company is not the sum of what all people working for this company have heard about:

Patent analysis requires knowing both the patent system and the domain to which the invention pertains. This job requires experience. The analyst misses many things if he was not working in the patent domain when the patent was filed.

For an organization that publishes many complex products, there are many patents that cannot be safely eliminated without an analysis.

Patent analysis takes time, three hours to report a first impression, one week to check if a process or method may infringe the patent. An opinion of counsel (the opinion of a third party attorney) may cost $15,000 and more.

So companies do not have the resources to analyze all patents and patent applications of interest. They actually concentrate their effort on competitors’ patents for two reasons: (1) The risk is higher in case of infringement of a competitor patent; a competitor can more easily demonstrate that it suffers non-monetary damage harm and be granted an injunction or even a preliminary injunction. (2) The analysis of competitors’ patents returns business intelligence data. This analysis gives useful results in any case.

The judge denied a first plaintiffs’ request for discovery explaining that he saw it "as a useless endeavor." He added that "given the practice of citation before the Patent Office, particularly in Interference proceedings, I am unlikely to attach a great deal of weight to the fact that somebody has actually cited a patent." [Note to CHI Research: this is what judges think of patent citations.] The judge observed that "in the application that resulted in US Patent No. 6,049,671, the [US]PTO sent Microsoft a rejection of its application, one of its grounds being a citation to the 5,838,906 patent as prior art. What this document shows is that the examiner found some prior art not relied upon in the application that was 'considered pertinent to the applicant’s disclosure', and it included a citation of 5,838,906 patent as disclosing 'that self-extracting data objects are known in the art.'"

Of relevance to the inequitable conduct issue:

The solution of Dr Doyle (compiled program objects) and the solution of Dr Wei (interpreted program objects) were different. Dr Doyle disclosed Java and could feel that a ViolaWWW disclosure would have been cumulative (redundant). Dr Doyle was the respected expert in the e-mail discussion. Dr Wei, with his inferior English skills (pitilessly reproduced by the judge) was looking for an agreement and maybe even for a kind of recognition. The discussion sounded like the debate between Andrew Tanenbaum and Linus Torvalds, in which Linus Torvalds desperately tried to defend his Operating System, Linux.

Though "applicants are not conscripted to serve as an investigative arm of the USPTO", "one should not be able to cultivate ignorance, or disregard numerous warnings that material information or prior art may exist, merely to avoid actual knowledge of that information or prior art." This case was close and the judge logically found that the materiality of the ViolaWWW disclosure had to be decided at trial and that a summary judgment on the issue of intent was inappropriate at this time

Wrong. The '906 survived a director-ordered re-examination. The first paragraph of the Daily Californian article implies a Microsoft connection to the re-examination: UC's coveted patent for Web browser technology was reaffirmed last Wednesday by the U.S. Patent and Trademark Office after a six-year legal battle with Microsoft Corp. over the technology giant's alleged infringement of the university's patented browser technology.

"We are pleased that the patent office has validated, for a second time, the university's patent," said UC spokesperson Trey Davis. "This re-examination reflects an exhaustive veting of the patent claims and puts to rest any future questions about the validity of UC's patent."

Wrong. There are prior art, invalidity issues in the present remand to ND Ill.

-->The case also illustrates that a specific damages provision in a software licensing agreement is a tool in the licensor's arsenal and complements a software-code escrow agreement. Each is an important risk-management device. Of course, a licensee that plans to build an enterprise on licensed software may want some recourse if the licensor goes out of business or is otherwise unable or unwilling to maintain the software. A software-code escrow agreement permits the licensee to have access to the source code in order to obtain maintenance or other related services from third parties. But from the licensor's perspective, exposing source code to third parties runs the risk of revealing valuable trade secrets. In the same way, a specific damages provision in the event of a misappropriation of those trade secrets by the licensee allows the licensor to quantify the value of its intellectual property in advance. The licensee knows what is on the table if the intellectual property is misused.

Sirna gets patent in RNAi therapeutics

Sirna Therapeutics, Inc., a clinical-stage RNAi therapeuticscompany, announced Sept. 27 that the United Kingdom Patent Office has issued a broad patent covering RNA interference (RNAi) mediated inhibition of gene expression using short-interfering ribonucleic acids (siRNA). The patent claims, which are not limited to a specific siRNA sequence or structure, broadly cover any siRNA molecule which targets conserved sequences within avirus or a gene. This patent is important because it enables increased therapeutic potential of RNAi technology.

On Monday, Sept. 26, the Electronic Frontier Foundation (EFF) filed a friend-of-the-court brief with the United States Supreme Court, asking the Court to review an important patent case that has broad implications for free speech and consumers' rights.

The Federal Circuit Court of Appeals ruled earlier this year that eBay violated MercExchange's online auction patents and that eBay could be permanently enjoined, or prohibited, from using the patented technology. Then the Court went a dangerous step further. It held that patentees who prove their case have a right to permanent injunctions unless the injunction poses a risk to public health. This "automatic injunction" rule deprives judges of their traditional discretion to consider how an injunction might affect other public interests -- including free speech online.

If this rule is allowed to stand, free expression could suffer.

"We're not saying injunctive relief is never a good idea," said EFF Staff Attorney Corynne McSherry. "But courts must have the ability to look at how an injunction will affect a variety of public interests. That's especially true now, when so many companies are claiming patents on basic technologies that citizens use to communicate online."

In its brief, EFF argues that this ruling threatens free speech because patent owners who claim control over Internet publishing mechanisms are in a position to threaten anyone who uses them to broadcast their ideas, even for noncommercial purposes.

Added McSherry, "Given the explosion of new communications technologies such as blogs, instant messaging, and wikis, this is hardly the time to limit courts' ability to consider the benefits that a given technology brings to freedom of expression, or evaluate the chilling effects of forbidding the use of that technology."

Monday, September 26, 2005

The article gives background on the litigation between Solaia, the purported troll, and nine defendants in the District of Minnesota, concerning US 5,038,318 (cited by 25 US patents and claiming no priority).

Some relevant text follows.

Of the demand letter:

Pay up in 30 days or face an expensive court battle, the letter not so subtly warned, adding that Clorox, Kellogg, Kodak, Gillette, BMW, Eli Lilly and other firms had all paid Solaia's licensing fees. The letter noted that Solaia's attorneys were experienced patent enforcers, having won 22 verdicts in eight years worth more than $400 million.

Of a recipient of the demand letter, Andy Ubel of Valspar:"I knew this was very, very serious. This was not anything about engaging in a negotiation. This was about, 'Pay up or we'll sue you and it'll cost you more to defend yourself ...' This was a mess. It was so messy that if you are all by yourself you just get creamed."

Of the troll issue:Valspar was face to face with what some industry lawyers call a "patent troll." The term, said to be coined at Intel after it was hit by patent cases, is typically applied to a company that makes money solely by buying and enforcing patents or demanding licensing fees.

Troll firms "have no assets. They don't innovate. They have no R&D. They have no activity to speak of other than writing letters and demanding large checks," said Paul McDowall of the Minnesota Intellectual Property Lawyers Association.

The amounts claimed by such suits are often small enough to induce the defendants to decide that a quick payment is the cheapest solution. That's because it can cost more than $2 million to defend a patent infringement accusation in court.

"It can cost seven figures just to get through a ... hearing before a judge," McDowall said.

David Peyton, the National Association of Manufacturers' director of technology policy, said plaintiffs in such cases "are not practicing the technology. They just bought the patent and so it's just a financial instrument. It's a common practice."

One of Solaia's attorneys rejects the troll talk, particularly in reference to his client.

"It really blows my hot buttons to hear all this troll nonsense. Those who talk about trolls are know-nothings. They have no background dealing or enforcing patents," said Ray Niro, the Solaia attorney at Niro, Scovone, Haller & Niro who sent the letter to Valspar. He said his style of patent litigation helps cash-poor inventors protect their intellectual property, adding that big companies are not the only ones entitled to patent protection.

Of defendants joining forces:General Mills and Toro got the letter. So did Spam creator Hormel, and glue maker H.B. Fuller. As did Bemis Co. the packaging materials firm, Imation Corp., which makes CDs, and Donaldson Co,. the giant maker of truck mufflers and filtration systems.

Initially, each of the nine companies hired an independent counsel, sought software specialists and met with plant managers to verify that the patent in question -- No. 5,038,318 -- was not employed in their automated manufacturing processes. The patent, which Solaia purchased in 2001, was related to a spreadsheet software device for communicating real-time data between automated machines.

Of the litigation:

In June 2003, seven of the Minnesota manufacturers sued Solaia in U.S. District Court in Minnesota. Donaldson and Imation joined the lawsuit that summer.

Solaia's law firm, Niro, Scavone, Haller & Niro, is well known and has sued several companies mostly in Illinois, winning favorable rulings from judges there.

By sticking together, the firms made a strategy of "divide and conquer" impossible, said Peyton of the National Association of Manufacturers .

After two years of court battles, a Chicago judge dealing with another Solaia lawsuit interpreted Solaia's definition of its interface spreadsheet technology in such a way as to make it difficult for the company to claim infringement in the Minnesota case.

Eleven days after the March 28, 2005, decision, Solaia and the nine Minnesota firms settled, with Solaia giving the Minnesota firms the right to use the patent and released them from any claims.

The cost:

The total defense costs were divided by a factor of nine. So it was $67,500 for each of the defendants.

Ronald Stern, president of the Patent Office Professional Association, says many examiners are frustrated by production goals that give them only 20 hours on average to examine an application for a new invention. These goals have not changed since 1976, despite the increasing complexity of patent applications.

"You cannot increase the quality of examination without providing examiners the necessary time to do the job," he says.

As a separate matter, it may be that patent examiners are working unpaid overtime to keep up with output requirements. From http://www.popa.org/newsletters/aug05.shtml:"Both my family and professional lives are suffering severely" from working many hours of unpaid overtime to maintain high production, the employee said.

Litigation is also an issue in patent reform. "Today, hundreds of patent infringement cases are pending against computer software and hardware companies, costing the industry hundreds of millions of dollars each year," says Emery Simon, counsel for the Business Software Alliance. "Left unchecked, these practices stand to disrupt the activities of true innovators, and impede their ability to deliver products and services to consumers."

This information came from an article by Kent Hoover running in South Florida BizJournals. There is a table therein giving patent grant data for the year 2004 as: 382,139 applications filed, 181,302 grants, for a "grant rate" of 47%. Distinct information on the grant rate issue appears in "Things are not always what they seem," in the October 2005 issue of Intellectual Property Today.

********from I/P Updates (Sept. 26, 2005)-->

The U.S. Government Accountability Office ("GAO") has published "Testimony Before the Subcommittee on Courts, the Internet, and Intellectual Property, Committee on the Judiciary, House of Representatives" which summarizes the results of its Report of GAO-05-1008T entitled "Improvements Needed to Better Manage Patent Office Automation and Address Workforce Challenges." Their conclusions include that the

USPTO Continues to Pursue a Fully Automated Patent Process, but Has Not Effectively Managed its Strategy for Achieving This Capability.USPTO Lacks Essential Information Technology Investment Management Processes to Support Its Patent Automation.USPTO Has Taken Steps to Help Attract and Retain a Qualified Patent Examiner Workforce, but Long-Term Success Is Uncertain.USPTO Faces Long-Standing Human Capital Challenges that Could Undermine Its Recruiting and Retention Efforts.USPTO Has Made Greater Progress on Strategic Plan Initiatives that Enhance the Agency’s Capability Rather than Productivity and Agility

Of relevance is text at http://www.popa.org/newsletters/aug05.shtml:

Faulty Patent Application Routing Delays Action

Misclassification by the Office of Initial Patent Examination (OIPE) using the electronic Application Routing Tool (ART) is delaying action on newly filed patent applications by routing them to the wrong art units and/or technology centers (TCs). This is causing applications to languish in USPTO cyberspace for weeks, months or sometimes even a year or more. This problem is made worse by the lack of an adequate application transfer procedure and an audit trail to identify problem areas. OIPE Director Thomas Koontz reports that the agency is working to correct the initial routing insufficiencies.

The current ART software, a part of the Image File Wrapper system (IFW), does not automatically assign continuation-type cases to the art unit and examiner who worked on the parent application. In addition, the software routes applications to the first art unit in a TC or workgroup that meets its keyword searching criteria. Thus, docketing examiners spend considerable additional time researching classification issues and trying to transfer cases to the right art units. Some docketing examiners have an unfair burden because they must docket the majority of cases for their workgroups, which hold up to ten art units.

Before OIPE started using ART, about a dozen full-time classifiers designated cases to the correct art unit approximately 80 percent of the time. Now that percentage is reversed. Recent research within several biotechnology art units found that, of 109 cases sent to one particular art unit, ART assigned 13.7 percent correctly and 86.2 percent -incorrectly.

Of those incorrectly assigned, 63.3 percent were determined to belong elsewhere after an examiner consulted Patent Application Location and Monitoring (PALM) continuation data that ART had ignored because ART was not designed to access PALM data.

(...)When managers do pick up the eDAN messages, they contain no information on where the case has been, who has reviewed it or why it's bouncing around. The software doesn't allow any history to accompany the reassignment message, obliging the manager to docket blindly or conduct additional research.

A parallel transfer inquiry system exists in the PALM Expo software that allows an examiner to create a record or audit trail. However, only about half of the docketing examiners use this process because it requires double the effort to duplicate the eDAN transfer message in PALM Expo. Even if the docketing examiners send two messages, some examiners only respond to the eDAN message and not the PALM Expo message, thereby negating the recordkeeping system. Creating a separate PALM Expo message consumes extra time because it requires the docketing examiner to write down or memorize the application serial number from eDAN to then key it into the PALM Expo system.

***A different article has some questionable statements.http://www.fairfieldcbj.com/current_issue/092605frop04.html

-->Whether an inventor uses a patent lawyer, application and filing fees are unavoidable and they have increased substantially over the years. [?]

"The fees have gone up because the number of patent applications has gone up, and it's another way for the patent office to make money," said Schultz.[?] Schultz, a Swiss native, has worked in the printing industry for 60 years and holds a number of patents, one for a printing cylinder.

-->"An important thing to remember is that The Patent and Trademark office is entirely fee-funded," said Richard Maulsby, director of the agency's public affairs.[No mention of fee diversion!]

-->Lack of reward for company inventors-->

While employed by the Dixie Cup Co., Schultz came up with the process for manufacturing the Riddle Cup, where individual cups could be imprinted with a different riddle as they came off the production line. He said the company made $40 million in sales off his process. His reward? A hundred dollar check and letters of congratulation from the executives. "When you work for a company, they own your ideas."

-->Many inventors believe the patent filing process is not inventor friendly. "Before you can file for a patent, you have to file for the patent cooperation treaty (PCT), [?] then you go into the queue and then you file individually in all the countries," said William Kurt Feick of New Canaan. Feick is an international manufacturer of wheelbarrows with manufacturing plants in China. His most recent patent was for a wheelbarrow bumper.

-->The U.S. Patent Office has a backlog of 600,000 patents, with another 300,000 filed every year. In his testimony to Congress, John Dudas, under secretary of commerce for intellectual property and Director of the U.S. Patent and Trademark Office Jon Dudas, said the office will hire 940 new patent examiners by the end of the year, which represents a 25 percent increase in the patent examining staff. The agency is planning to hire 1,000 patent examiners a year between 2006 and 2011.

**Separately, a new procedure at the USPTO

There is now docketing for some sort of response to the new "Pre-Appeal Request for Review" which *may* operate to change the deadline for the appeal brief.

****Broadband has a good thread on patent reform.http://www.broadbandreports.com/shownews/67834

****from i/p watch:

Georgetown University Law Professor John R. Thomas, for his part, noted in his testimony that this latest version of patent reform legislation omits many of the recommendations of two landmark patent law reform studies issued by the National Academies Board on Science Technology and Economic Policy (STEP) [NAS] last year and the Federal Trade Commission [FTC] in 2003.

Sunday, September 25, 2005

At an April 2005 faculty meeting, Bowdoin University Professor Carey Phillips questioned whether senior staff were held to the same ethical standards as faculty and students. Dean of Academic Affairs Craig McEwen responded, "Senior staff are subject to the same standards as students and faculty." At the meeting, Phillips expressed concern that the work of an unidentified faculty member had been used in a grant application without that professor's permission. "Unpublished work of a faculty member was submitted, essentially verbatim, as a grant proposal without the knowledge or permission of the faculty member," Phillips said.

McEwen added that the issue would come before the Faculty Affairs Committee in May. That committee did take up the matter, but would not release details as to what happened.

McEwen told the [Bowdoin] Orient that in April 2005 he was referring to the equal application of ethical standards "as a broad philosophy because clearly there are student honor code rules that apply specifically to students. We don't have an honor code set out in the same form [for staff members], but we do have fundamentally the same expectations or appropriate conduct for attribution, and the expectation is that people won't plagiarize."

Various law school professors have suggested that the USPTO utilize review mechanisms as found in scientific publications and in grant reviews to evaluate such questions as obviousness. I had pointed out the relevance of an early episode of Law & Order ("Big Bang") wherein a professor/advisor had first unfavorably reviewed a grant proposal of a former student and then stolen it. The Bowdoin event illustrates the stealing part. The Arizona State University episode illustrates that the high stakes of the patent world motivate a number of questionable activities.

In the Laurence Tribe plagiarism matter at Harvard Law School, it has become clear that professors are not held to the same standards on plagiarism that are enforced against undergraduate students.

Bryant still winning patent fight against Caterpillar

On September 22, 2005, a U.S. Patent and Trademark Office examiner declared for the second time that most of the claims for which Caterpillar was awarded a patent last year were not patentable because they were anticipated or obvious over WO 98/02653 to Clyde Bryant of Alpharetta, Georgia, now 78.

At stake in the patent fight are the rights to an idea that Caterpillar has used to sell more than 200,000 of its award-winning "ACERT" diesel engines.

Bryant's challenge, in the form of a request for a reexamination of the Caterpillar patent, resulted in a declaration by examiner Thomas Moulis in December 2004 (see earlier post on IPBiz) that the bulk of Caterpillar's claims had already been described by Bryant's patent and others.

In the next phase of the Paten Office's reexamination procedure, Caterpillar argued that its patent should not be withdrawn and submitted statements from experts who said Bryant's invention too vague to have merited a patent. Bryant's lawyers then responded to the Caterpillar arguments and brought in statements from their own experts.

Caterpillar now has 30 days to decide whether to contest Moulis' Sept. 22 Office Action, which was virtually identical to the December finding. It can also appeal to the Court of Appeals for the Federal Circuit.

In a bit of sublime irony, the Intellectual Property Owners [IPO] Association named the two Caterpillar engineers national "inventors of the year" last year for work relating to ACERT. And, the IPO recently presented results of a survey suggesting that there was a perceived lack of quality in US patents, as discussed in this blog, ip-updates, and elsewhere. Nevertheless, the IPO presented an award to inventors for something that had, in part, already been invented. Perhaps there is a lack of quality in the IPO award presentation process? In any event, the episode illustrates some of the subjective quality in the analysis of technology and the difficulty of the task of the USPTO in granting, or not granting, patents. As another point, Jan-Hendrik Schon had been the recipient of numerous scientific awards, even though the underlying work was demonstrated to be fraudulent. For example, Technology Review gave Dr. Schon a TR100/2002 award, reported within the June 2002 issue, even as the fraud was becoming known. [See for example "Walking on Sunshine?", Intellectual Property Today, November 2002.] Technology Review is an MIT enterprise. Although the PTO does make some mistakes in the patent granting process, it is clear that other bodies are also making significant errors in technology assessment. [Caterpillar engineers Jim Weber and Scott Leman were presented the 2004 Inventors of the Year Award from the Intellectual Property Owners Association in recognition of the ACERT engine.]

One difference is that the PTO corrects its mistakes, whereas some of the other bodies ignore previously made mistakes. In the realm of the patent grant rate discussion (Quillen Webster Clarke), errors about "what Clarke assumed" and the correlative consequences of the errors have not been corrected by the relevant law professors and law review. Thus, false arguments are made, not corrected, and bodies such as the FTC and the NAS rely on the false arguments to recommend policy changes. The PTO, unlike law reviews, has and uses a policy to correct errors.

These and related issues are explored in "Things are not always what they seem," Intellectual Property Today, October 2005 issue (for AIPLA meeting).

**Information on the re-examination**

--> Pertaining to US 6,651,61895/000,049 Action closing prosecution (non-final) 09-22-2005 Claims 1-17 are rejected.Specifically, claims 1-5, 8, 10, 12-13 and 16-17 are anticipated under 102(b) by Bryant, WO 98/02653. Other claims obvious over Bryant in view of Obert or Khair.Of the anticipation rejection, the examiner adopted the argument of the third party requestor, except for claim 3.

To date, the '618 patent has been cited by six US patents. All six citing patents are assigned to Caterpillar. No entity other than Caterpillar has cited the '618 patent.

Cat first introduced ACERT as its solution in meeting an Environmental Protection Agency mandate to significantly reduce NOx and PM emissions from diesel engines in 2002. The move to go to ACERT was considered controversial at the time since all other major engine manufacturers elected to meet the standard with exhaust gas recirculation (EGR).

In order to meet even tougher 2007 standards, Cat stayed with ACERT but also incorporated a form of EGR, where exhaust gas is drawn from downstream of the diesel particulate filter and returned to the engine upstream of the twin turbos and aftercooler.

US company Cubist Pharmaceuticals holds a patent for Cubicin, a drug for treating skin infections, in which it claims to have invested $560 million. The company filed an appeal with the Tel Aviv District Court objecting to the Israel Patent Office’s decision not to extend the deadline for submitting a patent extension request. The patent is due to expire on October 8.

Cubist alleges that because of a human error, it failed to file a request to extend its patent within the 60-day legal limit. In the first half of August 2005, a few days after becoming aware of the error, the company filed a request with the Patent Office for a postponement of the deadline for filing an extension of its patent, but the Patent Office rejected this request. The company’s appeal alleges that the expiration of its patent will cause it irreversible damage, as a result of its $560 million investment in development of the patent-protected preparation and manufacturing process.

If the appellant is not allowed to extend its patent, and generic companies begin production and marketing of a corresponding generic drug, the appellant will not be able to enjoy the results of its enormous investment.

In the last few months, there has been discussion of "number of patents" or "number of patents/employee" correlating with innovation. This is likely nonsense. Innovation is one thing; invention is another. Sometimes they are related; sometimes not.

From TheDeal.com [cnet]:

Piling up patents, though, can have as much to do with business strategy as with inventing things. Nowhere is that more true than at software companies, which make products that weren't even patentable in the U.S. until 1981, and which still have widely varying approaches to the task of managing their intellectual property. Those approaches are being shaped by multiple factors, from the part of the market the companies serve to the threat or opportunity they perceive in the burgeoning open-source software movement, which is dramatically affecting the IP rules in this maturing (but far from mature) industry.

Consider: IBM, the fourth great power in software, has more patents than anyone, a reflection of its heritage as a broader-based information technology company as well as its success over the years at building up a famously lucrative licensing operation serving all its businesses. All told, the Armonk, N.Y.-based behemoth has about 40,000 patents. Yet IBM is also the biggest backer of open-source software, which is why it made some 500 relevant patents freely available to all comers in January. What that will mean for Microsoft, the company with the most to lose from open source, isn't yet clear. But figuring it out is partly the job of Marshall Phelps, the IP luminary who built up IBM's licensing operation--and since 2003 has worked for Microsoft.

George Robert Pettit, professor at Arizona State University and holder of over 60 patents, has filed suit against the university in a dispute over patent policy and possible retaliation against Petit for criticizing school patent policy.

Pettit said he was fired from his position as director of the Cancer Research Institute in July, 2005. Petit had charged that associate professor Yung Chang had submitted faulty patent applications that were based on flawed experiments. Chang had applied for them under Pettit’s name, putting Petit and other scientists at risk of federal fraud charges and placing the public’s health at risk. However, a university investigation determined Petit had made false statements about the associate professor Chang to ruin her reputation. Pettit alleges the firing actually was in retaliation for his efforts to expose poor management and potentially faulty patents.

Pettit filed a lawsuit last month in Maricopa County Superior Court, but ASU had the case moved this week to U.S. District Court in Phoenix. Pettit claims ASU President Michael Crow, vice president Milton Glick and Biodesign Institute director George Poste have tried to force the Cancer Research Institute out of its own building and to force Pettit to leave.

Aspects of the lawsuit bring up the "big business" face of the Bayh-Dole Act. Recall that the act has a preference for the licensing by universities to small businesses. That purpose is subverted when the small business sublicenses the technology to large businesses.

The lawsuit cites an incident in 1997, when ASU official Alan Poskanzer met with drug maker Oxigene Co. to reach on agreement on what the company would pay for a medicine Pettit invented. Pettit claims Poskanzer offered Oxigene a two-year option for the drug for $300,000.

Pettit protested the deal for two years, arguing the university wouldn’t receive sub-licensing fees. But ASU signed the deal anyway, the lawsuit says.

Problems arose in December 1999, when Oxigene sublicensed the patents for $70 million, with a $20 million cash payment, to drug giant Bristol-Myers Squibb. ASU got nothing from that deal, the lawsuit says, but sublicensing could have netted it $10 million. [Here, the nominal complaint was that the university did not share in the sublicense. Maybe the American taxpayer should be a bit concerned about this. The American taxpayer paid for the research funds for a drug that went to big business. Had the research failed, the taxpayer would have been stuck with the loss, but when the research succeeded the taxpayer got nothing. Citizens in California have been worried about this aspect in the stem cell initiative.]

Here, the university also got stuck with legal bills as ASU and Oxigene ended up in a legal dispute that cost the university $170,000. Not as much as the University of Rochester paid for the ill-fated COX-2 litigation.

The Petit lawsuit also implicates patent policy at Arizona State.The lawsuit also says the Arizona Board of Regents changed the patent policy in 1999 at the behest of Poskanzer and Jonathan Fink, ASU’s vice president of research, to remove licensing oversight and add a 15 percent surcharge on gross licensing income collected from ASU’s patent licenses. Pettit opposed several of the changes.

The Arizona Legislature got involved in the dispute in 2000, with Pettit testifying at committee hearings. ASU ended up pledging in a letter to drop the surcharge from the policy.

Lawmakers began questioning spending by ASU’s Office of Technology Collaborations and Licensing, which is responsible for patents. A state audit revealed the office was mismanaged and inappropriately spent funds, eventually leading to Poskanzer’s termination.

The lawsuit also implicates the Arizona whistleblower statute. Pettit was accused of scientific misconduct in 2000, but an ASU investigation later determined the charges were unfounded. ASU also audited the Cancer Research Institute’s finances in 2001 while Pettit was on a research expedition. The audit found nothing was amiss. The interpretation of Pettit's actions against Chang are also part of this. [As an aside, recall Lucent/Bell Labs immediately withdrew Jan-Hendrik Schon's patent applications after fraud was uncovered.]

I know you are deeply interested in the patent reform legislation and generic biologicals and I intend to devote most of my remarks to those two issues.

However, there are other issues which I want to mention to you that will help explain why these two important matters are not front burner issues as the first session of the 109th Congress comes to an end this fall.

You all know that the Judiciary Committee and full Senate are working on the nomination of Judge John Roberts to be the next Chief Justice of the United States. And once we complete work on that, we will work on another Supreme Court vacancy that may take until December.

(...)Patent Reform

As I am sure you all are aware, patent reform is one of the most significant intellectual property issues currently in Congress. In working on this issue, I have tried to come up with a few principles and goals that I hope will guide some of the debate in the Senate and any eventual legislation.

Goal 1: Increasing patent quality.

Many of the current complaints about the patent system that I have heard deal with the number of suspect and over-broad patents that are issued. Thus, in considering patent reform, it appears to me that Congress and the PTO must cooperate to find ways to increase patent quality. Increased resources for the PTO will have some beneficial effect on patent quality, but I am convinced that more money will solve only part of problem.

Human errors in the application and examination processes, efforts of applicants to obtain broad claims to maximize the scope of their exclusive rights, and occasional malfeasance by applicants result in a significant number of suspect or bad patents. Although the PTO does a reasonably good job, enough bad patents still issue to cause some real problems. For obvious reasons, this leads to inefficient litigation, as well as significant economic dislocation and business risk. Suspect patents also appear to enable abusive litigation. Because bad patents are generally of little value to productive companies, in many cases their value is maximized by using them as a basis for infringement suits against deep-pocket defendants.

I am convinced that part of the current problem with suspect patents – and the resulting increase in litigation – stems from the lack of an effective administrative mechanism for reconsidering or modifying suspect and over-broad patents. This forces legitimate disputes into court and increases the potential for abusive litigation in illegitimate disputes. The current administrative process of reexamination is fundamentally flawed and, as a result, goes virtually unused. Although there is little consensus regarding the details, there is some consensus for addressing this problem either by fixing the existing re-examination process or by creating a post-grant review process so that third parties can challenge suspect patents in an administrative process. Similarly, many support allowing third parties to submit prior art that is relevant to an applicant’s patent claims before the patent is issued.

I believe that any patent reform legislation that is to have a long-term impact will necessarily include one or more of these proposals.

Goal 2: Increasing international harmonization.

Over the past several decades, various experts, including academics, presidential commissions, and blue-ribbon panels have advocated increased harmonization between the U.S. patent system and those of other countries. Advocates of harmonization often cite three different types of anticipated benefits from increased harmonization. First – faster, more predictable patentability determinations; Second – decreased litigation costs in the long term; and, Third – reduced redundancy in patent examination and associated decreases in costs to patent holders in obtaining global patent protection. However, there are those who question the need for increased harmonization or who oppose it outright. Some argue that harmonization would disadvantage specific interests or groups, including independent inventors, small businesses, non-profit entities, and educational institutions. Others argue that the potential efficiencies of harmonization simply do not outweigh the perceived benefits of some of the unique aspects of U.S. patent law.

In the context of patent reform legislation, we are working through the arguments regarding moving from our traditional first-to-invent regime to the internationally adopted first-to-file system; eliminating the best-mode requirement; requiring publication of all patent applications after 18 months; and, moving toward a more uniform definition of prior art that is closer to what is used internationally.

It seems clear that some of the harmonization proposals have significant support both in Congress and in the patent community. I would anticipate that aspects of international harmonization will be included in patent reform legislation this Congress.

Goal 3 – Decreasing unwarranted or abusive patent litigation.

By all accounts, patent litigation has become a significant problem in some industries and for some types of litigants. There are a number of factors in patent law that drive up the cost and uncertainty of litigation in ways that appear to be unjustified. However, some of the principal problems and costs associated with patent litigation are not uniform across industrial sectors. This has led to substantial and sometimes vociferous disagreements about the nature of the underlying problems and, thus, what the appropriate solutions might be.

A variety of industries and companies argue that a certain class of patent holders – who some less-than-affectionately characterize as “patent trolls” – attempt to secure disproportionately high settlements from defendants that cannot afford to take an intolerably high-risk of treble damage awards or massive lost profits if an injunction keeps their product off the market during and after litigation.

Two approaches to dealing with the current problem of patent litigation have emerged in the patent reform debate.

One focuses on eliminating subjective elements and fact-intensive inquiries from patent litigation. The other, and much more controversial, approach involves altering the remedies available to patent holders in litigation.

Subjective and unduly fact-intensive elements inherently lead to higher litigation costs and increased certainty in virtually all areas of litigation. They increase costs at most stages of litigation, but the impact on pre-trial discovery costs is the most significant. Because they open the door to extensive discovery, they are also susceptible to abuse when used for strategic purposes, such as uncovering competitive information from competitors or threatening costly discovery to force settlements of unmeritorious suits. Nevertheless, the pertinent question is not simply whether the subjective elements of patent law increase cost and decrease certainty, but whether there is some purpose served by retaining such elements despite the costs. There are at least three such elements that appear to have little or no justification given the associated litigation costs.

Many possible approaches have been suggested in this area, but the most serious discussion revolves around eliminating or altering three subjective elements: the doctrine of willfulness, the best mode requirement, and the doctrine of inequitable conduct. We in Congress are committed to finding ways to simplify litigation, curb unproductive discovery, limit opportunities for abuse, and decrease litigation uncertainty, but we have not yet reached consensus on what approach best accomplishes this goal with respect to these subjective elements.

The second – and much more contentious – approach to addressing the patent litigation problem involves altering the remedies available to a patent holder.[LBE note: modifying the law on injunctions] This approach is based on the assertion that current law imposes disproportionate liability and business risk on legitimate enterprises.

As I have mentioned, the costs of allegedly-abusive litigation tactics do not seem to be evenly spread across industries or parties, and any legislative effort in this area means wrestling with many devilish details to balance the interests of numerous different industries. Two challenges we face revolve around the advisability of altering the standard for obtaining injunctions; and codifying a rule for the apportionment of damages.

Altering the standard for determining whether injunctive relief should be granted in a patent infringement case has emerged as perhaps the most contentious issue in the patent reform debate. Large high-tech companies, many of which have products covered by thousands of patents, believe that some change in current law is necessary to prevent what they consider as something akin to legalized extortion by plaintiffs who use the threat of an injunction to obtain settlements that are allegedly disproportionate to the value of the patent that is infringed.

Because the profitable life of many high-tech products is relatively short, an injunction that keeps these products off the market for a year or two can threaten the profitability or even the viability of a small or mid-sized tech company, which arguably forces these companies to settle cases for much more than the claims are actually worth.

To add to the difficulty, some believe there appear to be quite a few over-broad patents in these areas, resulting in a situation where an infringement suit might be successful even though it would have failed if the patent claims were written properly. The tech industry has dealt with this problem in part through cross-licensing to avoid the mutually assured destruction that would accompany aggressive enforcement of all relevant patent rights.

Cross-licensing only works as a solution if the other potential litigants face a comparable threat from the available remedies. Many tech companies argue that the main threat is not from other legitimate companies, it is from overly-aggressive patent holders [hmm, the University of Rochester?] and their attorneys who use the disproportionate threat of an injunction to extort large settlements based on nearly worthless patents. It is alleged that these types of patent holders, commonly referred to as patent trolls or licensing shops have no interest in cross-licensing because – in the most extreme examples – they don’t make or sell anything and therefore have no business risk from an injunction. They allegedly exist predominantly for the purpose of threatening litigation to obtain settlements.

Interestingly, among the most vocal critics of the high tech sector’s desire to amend the injunctive relief provisions in current law are the pharmaceutical and biotech industries, independent inventors, and some small business interests. Generally, the products patented by the drug companies and small inventors are discrete inventions covered by relatively few patents. They rely on the absolute exclusivity of their patent rights, often enforced by injunctions, to ensure that they are able to commercialize their inventions and enjoy the fruits of their innovation. Similarly, small inventors rely on injunctive relief to equalize the playing field when competing against larger, better-funded enterprises.

This same type of debate is playing out with respect to the provisions authorizing damages in patent litigation.

I understand that this issue is most important to the software industry. It claims that under current law a patent holder who successfully sues a software company for infringement may be rewarded well beyond the actual value that the invention contributes to a product.

The argument is that, under some damages theories, a plaintiff can receive damages based on the value of the market for an entire product when the patented invention is only a small part of the actual product.

For example, suppose damages were based on the market value for an entire car when the patent only covered the windshield wiper motor or some other component out of hundreds. Crafting language that satisfactorily codifies a proportional contribution measure of damages is just one of the many challenges that Congress faces in the process of drafting patent reform legislation.

As you may have guessed from my remarks, my sense is that patent reform still has a fair distance to go before a sufficient consensus forms in Congress around a particular set of reforms. In my experience, this is not uncommon for patent reform legislation, which often takes several years from conception to enactment.

Turning to another topic that is near and dear to most everyone here, including me, I would like to spend a few minutes on the issue of follow-on biologics.

Follow-on Biologics

As most of you know, I have for some time been deeply interested in the issue of devising an appropriate path for the approval of off-patent follow-on biologic medicine.

Thursday, September 22, 2005

US Patent 6,947,978

The assignee of US 6,947,978 is The United States of America as represented by the Director, National Security Agency (Washington, DC).

The first claim:

1. A method for geolocating network equipment associated with a logical network address on a communications network, comprising the steps of:

measuring a network latency from a plurality of network stations to a plurality of network endpoints of known physical location by

pinging said network endpoints from said network stations multiple times over a calibration period,

determining round-trip propagation times between each of said network stations and each of said network endpoints over the calibration period from said pinging, and

setting the network latency for each combination of said network stations and said network endpoints to the corresponding minimum round-trip propagation time determined for each of said combination of said network stations and said network endpoints;

measuring the network latency from each of said network stations to said network equipment by

pinging said network equipment from said network stations,

determining the minimum round-trip propagation time between each of said network stations and said network equipment, and

setting the network latency between each of said network stations and said network equipment to the corresponding minimum round-trip propagation time determined;

for each of said network endpoints arranging the network latency from the network endpoint to each of said network stations in turn, in a particular order, as vector elements in an endpoint vector;

arranging the network latency from said network equipment to each of said network stations in turn, in said particular order, as vector elements in a network equipment vector;

determining a distance between the network equipment vector and each of the endpoint vectors; and

identifying the physical location of the network equipment as proximate to said known physical location of the network endpoint corresponding to the endpoint vector having said distance to the network equipment vector not greater than the distance from any other of the endpoint vectors to the target equipment vector.

Geo-location, sometimes called "geo-targeting" when used to deliver advertising, is an increasingly attractive area for Internet businesses. DoubleClick has licensed geo-location technology to deliver location-dependent advertising, and Visa has signed a deal to use the concept to identify possible credit card fraud in online orders.

The first major changes to patent law since 1999 are running into opposition from drug makers, fearful an overhaul could stifle their ability to bring innovative products to the market.

**Representatives of the Pharmaceutical Research and Manufacturers of America, the Biotechnology Industry Organization, high-tech groups and others failed in recent meetings to reach agreement on possible changes to patent law.

A judge now can issue an order to protect patent rights.

The new bill would allow orders only if the patent-holder would suffer irreparable harm without one.

A jury found that Ventana infringed claims of US 6,180,061 and US 6,183,693, pertaining to an automated slide stainer to stain tissue specimens. An injunction was issued against Ventana. In its decision, the CAFC upheld the injunction as to claims 8-14 of the '061 patent. As to the remaining claims of the '061, the CAFC upheld the verdict of infringement, but remanded as to a possible retrial on obviousness. With respect to one claim of the '693, the CAFC reversed, because the verdict was not supported by substantial evidence.

The CAFC cited Guttman v Kopykake, 302 F.3d 1352, on the concept of rolling claim construction. The CAFC noted that an interpretation of one claim that renders another claim meaningless is disfavored, citing to In re Cruciferous Sprout Litigation, 301, F.3d 1343. The CAFC cited Ecolab, 285 F.3d 1362, for harmless error in a jury instruction. The CAFC cited SanDisk, 415 F3d 1278, for the idea that a claim construction that excludes a preferred embodiment is rarely if ever correct. The CAFC discussed waiving of arguments; here, Ventana's arguments about anticipation were deemed to have been waived but those on obviousness were not.

On its loss on claim 13, CytoLogix was found not to have identified the structure corresponding to "temperature controller means." The CAFC cited Alpex v. Nintendo, 102 F3d 1214.

In Harris v. Ericsson, 2005 US App LEXIS 16175, an issue was whether Ericsson had waived the right to argue the law of WMS Gaming Inc. v. Int'l Game Technology, 184 F.3d 1339 (Fed. Cir. 1999) by not mentioning the case at trial. The dissent, arguing that it had, said "Ericsson, moreover, is presumed to know the law. See, e. g., Pittsburg & Lake Angeline Iron Co. v. Cleveland Iron Min. Co., 178 U.S. 270, 278, 44 L. Ed. 1065, 20 S. Ct. 931 (1900)." The 1900 case had stated "Everyone is presumed to know the law," although the case was not decided on this point. A belief that everyone knows the law is mistaken, and a presumption in that belief is likely to lead to inaccuracies possibly needing cure, as in the Harris case. No one in the Harris v. Ericsson case brought up WMS Gaming at trial, although it was quite relevant.

Wednesday, September 21, 2005

The gecko doing the fullerene nanotube?

The gecko has billions of tiny hairs on its feet and these create adhesion by means of van der Waals forces. But the determination of this mechanism was only made in 2000 by scientists at the University of California, Berkeley, and Lewis and Clark College, Oregon. A research team at Akron, Ohio, has created a gecko array using fullerene nanotubes. Fullerenes generally have been the darlings of nanotechnology but have been a solution looking for a problem. Now they may a good use.

Peter Forbes reported that last year the Berkeley team took out a patent listing a multitude of potential uses, including press-on fingernails, clean room processing tools and insect-trapping tape. The Berkeley patent application published in 2004 (20040005454; app. no. 338104; filed January 6, 2003) has a representative claim:

1. A method of forming an adhesive force, said method comprising the steps of: removing a seta from a living specimen [OUCH!]; attaching said seta to a substrate; and applying said seta to a surface so as to establish an adhesive force between said substrate and said surface.

There are government rights: This invention was made with Government support under Grant (Contract) No. N00014-98-C0183 awarded by DARPA through a subcontract from I.S. Robotics. The Government has certain rights to this invention.

There is a different published application (20050181170; 080037; filed March 14, 2005) which claims priority to a different provisional (This application claims the benefit of the earlier filing date of U.S. Provisional Application No. 60/380,595, filed May 13, 2002, which is incorporated herein by reference. Hmm, same question) This invention was made with Government support under Grant (Contract) No. N66001-01-C-8072 awarded by DARPA. The Government has certain rights to this invention.

A representative claim:

30. A method of fabricating an adhesive microstructure comprising: molding a structure having shafts supporting a plurality of stalks at an oblique angle; removing said structure to provide a template; molding the template with a polymer; and separating the template from the polymer to form the microstructure.

Tuesday, September 20, 2005

Of backlog, the article notes: From 2004 to 2005, 100,000 more patent applications came in than were approved.[query: disposed of, meaning approved or abandoned?] Over the years, the backlog of applications has grown to 604,000.

Of numbers: Patent application filings have been growing 6% to 8% a year for more than two decades, so the number of applications has nearly quadrupled since 1980. About 382,000 will be filed this year.

Of the issue of "time spent examining an application," the article notes

How long do you think all that research and decision-making takes? Weeks? Months? Try less than three days. The initial decision for an average digital camera patent takes 23.6 hours, or three eight-hour workdays. Usually, there's a follow-up exchange of letters and documents that takes snippets of an examiner's time over several months. Most patent applications get rejected at first, then lawyers and examiners go back and forth, narrowing the claims in a patent until the examiner is satisfied that every claim is unique.

and

The PTO has 4,200 patent examiners. So in 2005, 91 applications came in for each examiner. If you figure that each examiner works maybe 235 days a year, that leaves 2.6 days — 21 working hours — to review, approve and finalize each patent application if the PTO were to keep pace with the onslaught. [This number assumes that the examiners disposed of all 382,000 applications; basically 382/4.2. If the backlog is growing, then more time is being spent on an application, on average, than 21 hours.]

Of

The delays lead to confusing situations such as Creative Labs and Microsoft recently claiming patents for inventions that might be key pieces of iPod technology — long after the iPod has set the world on fire. Lawsuits ensue, lawyers get rich, bloggers bellyache, and on and on.

recall that Apple did file a 131 declaration to swear behind the Microsoft published patent application. The PTO (so far) ignored the declaration.

Three Acticon patents survive re-exam; expired patent examined?

Reexamination proceedings at the USPTO were initiated by AskeyCorporation (Askey) in response to a patent infringement law suit brought by Acticon against Askey. Reexamination was requested for three of Acticon's patents: U.S. Patent Nos. 4,603,320 ("Connector Interface"), 4,686,506 ("Multiple Connector Interface") and 4,972,470 ("Programmable Connector"). The Patent Office disagreed with the Askey's arguments alleging that these patents were invalid in view of the prior art.

During the reexamination of the '470 Patent, approximately 120 U.S.patents, 10 foreign patents, and 34 non-patent publications were brought to the attention of the Patent Office.

Acticon's patents cover specific aspects of "smart connector" devices used in mobile computer communication, networking, and instrumentation control. GPCI has successfully represented Acticon in 22 litigations related to these patents, and has obtained to date 133 licenses and settlements under the patents.

US 4,603,320 (issued July 29, 1986; filed April 13, 1983; why is this being re-examined in 2005? It has expired.) has been cited by 57 US patents.

US 4,686,506 (issued Aug. 11, 1987, filed July 28, 1986) has been cited by 38 US patents. It is a continuation-in-part of application Ser. No. 484,823 filed April 13, 1983, U.S. Pat. No. 4,603,320.

About Me

I'm a patent lawyer located in central New Jersey. I have a J.D. from the University of Chicago and a Ph.D. from Stanford University, where I studied graphite intercalation compounds at the Center for Materials Research. I worked at Exxon Corporate Research in areas ranging from engine deposits through coal and petroleum to fullerenes. An article that I wrote in The Trademark Reporter, 1994, 84, 379-407 on color trademarks was cited by Supreme Court in Qualitex v. Jacobson, 514 US 159 (1995) and the methodology was adopted
in the Capri case in N.D. Ill. An article that I wrote on DNA profiling was cited by the Colorado Supreme Court (Shreck case) and a Florida appellate court (Brim case). I was interviewed by NHK-TV about the Jan-Hendrik Schon affair. I am developing ipABC, an entity that combines rigorous IP analytics with study of business models, to optimize utilization of intellectual property. I can be reached at C8AsF5 at yahoo.com.